Now Is the Time to Invest in These Debt Funds
By Julie Segal – Institutional Investor
PennantPark was featured in Julie Segal’s Institutional Investor piece, which analyzed a collection of opportunities in middle market lending funds and private equity. Though the recent market disruption has limited investment activity, Segal points to PennantPark’s research which highlights that money invested during crises is dedicated to deals that use less leverage and provide investors the opportunity to capitalize on future performance.
Specifically, Founder and Managing Partner Art Penn highlighted the firm’s experience from 2007, when the average debt-to-earnings multiple was 5.6 for middle market deals before falling to 4.5 a year later and provided his rationale as to why investors should be investing in 2020 and 2021-vintage funds in the current market. “The answer is that this is a vintage business,” Penn said. “If you look back to 2009, you should have done almost any deal. By 2018 and ‘19, deals had to meet a much higher bar.”